MiniMax expands Alibaba cloud pact as compute needs surge for training and inference
Chinese AI firm MiniMax has significantly increased its cloud computing and API service agreements with Alibaba Group Holding. The company raised its three-year purchase ceiling for Alibaba Cloud by 220 percent to US$1.2 billion. This comes after MiniMax burned through two-thirds of its original US$300 million cloud budget for this year by June. Additionally, its three-year API spending cap with Alibaba surged nearly 20-fold to US$62.5 million, reflecting a dramatic rise in compute needs for model training and inference. MiniMax, known for its M-series LLMs and Hailuo AI app, reported a 283 percent revenue increase in the first half of the year.
MiniMax's dramatic increase in cloud spending with Alibaba, particularly the 220 percent jump to a US$1.2 billion ceiling and the nearly 20-fold rise in API services to US$62.5 million, points to the intense compute demands of China's leading AI developers. Burning through two-thirds of its annual budget by June underscores the rapid scaling required for both training large language models and supporting live inference for applications like Hailuo AI. This growth is further evidenced by MiniMax's 283 percent revenue surge in the first half, driven by a 700 percent leap in enterprise sales. The reliance on Alibaba Cloud for such substantial compute power also highlights the strategic importance of domestic cloud providers in China's AI ecosystem. While MiniMax's rapid expansion is impressive, the sheer cost of compute power remains a critical factor for profitability and sustained growth in the highly competitive Chinese AI market. The ability to manage these escalating infrastructure costs will be key for firms like MiniMax to maintain their trajectory.
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